CTP Exam Formulas You Must Know

 Passing the Certified Treasury Professional (CTP) exam requires more than memorizing definitions — you must know how to apply key formulas quickly and accurately. Many questions on the exam require fast calculations related to liquidity, working capital, capital markets, forecasting, and foreign exchange. 

Days Sales Outstanding (DSO)
DSO = (Accounts Receivable / Annual Credit Sales) × 365

Days Inventory Outstanding (DIO)
DIO = (Inventory / Cost of Goods Sold) × 365

Days Payable Outstanding (DPO)
DPO = (Accounts Payable / Cost of Goods Sold) × 365

Cash Conversion Cycle (CCC)
CCC = DSO + DIO – DPO

Why this matters: AFP consistently tests CCC because it measures how efficiently a business converts operations into cash.

Current Ratio
Current Ratio = Current Assets / Current Liabilities

Quick Ratio (Acid-Test)
Quick Ratio = (Current Assets – Inventory) / Current Liabilities

Net Daily Cash Position
Net Cash Position = Total Cash Inflows – Total Cash Outflows

These formulas appear in scenario-based questions involving short-term liquidity decisions.

Ending Cash Forecast
Ending Cash = Beginning Cash + Cash Inflows – Cash Outflows

Percentage-of-Sales Method
Forecasted Item = Sales × Historical Percentage of Sales

Forecasting questions test your ability to predict short-term cash needs.

Effective Annual Rate (EAR)
EAR = (1 + (i / n))^n – 1

Bond Equivalent Yield (BEY)
BEY = (Discount / Purchase Price) × (365 / Days to Maturity)

Discount Yield (DY)
DY = (Discount / Face Value) × (360 / Days to Maturity)

Holding Period Yield (HPY)
HPY = (Ending Value – Beginning Value) / Beginning Value

Expect 2–3 questions on yields and returns.

Future Value (FV)
FV = Present Value × (1 + r)^n

Present Value (PV)
PV = Future Value / (1 + r)^n

Present Value of an Annuity
PV = Payment × ((1 – (1 + r)^(-n)) / r)

These appear in loan, investment, and capital project questions.

Net Present Value (NPV)
NPV = Sum of (Cash Flow at Time t / (1 + r)^t) – Initial Investment

Internal Rate of Return (IRR)
IRR = Discount rate where NPV = 0

NPV/IRR show up consistently in corporate finance sections..

 Forward Premium or Discount (%)
Forward % = ((Forward Rate – Spot Rate) / Spot Rate) × (360 / Days) × 100

Cross Rate
Cross Rate = (Currency A per USD) / (Currency B per USD)

Indirect to Direct Quote Conversion
Direct Quote = 1 / Indirect Quote

FX is one of AFP’s favorite quantitative sections.

Weighted Average Cost of Capital (WACC)
WACC = (Weight of Debt × Cost of Debt × (1 – Tax Rate)) + (Weight of Equity × Cost of Equity)

After-Tax Cost of Debt
After-Tax Cost of Debt = Before-Tax Cost of Debt × (1 – Tax Rate)

Net Borrowed Funds
Net Borrowed Funds = Collected Balances – Required Balances

Earnings Credit (ECR)
Earnings Credit = Available Balance × ECR × (Days / 365)

This formula appears in service charge and bank fee offset problems.

Average Daily Float
Average Float = Total Float Amount / Number of Days

Float Reduction Benefit
Benefit = Float Reduction × Opportunity Cost of Funds

Expect at least one float question.

DSO Example
Accounts Receivable = 250,000
Annual Credit Sales = 1,500,000
DSO = (250,000 / 1,500,000) × 365 = 61 days

AFP loves simple but tricky calculation questions like this.